Latest news with #CovenantHomeownershipProgram
Yahoo
16-03-2025
- Business
- Yahoo
Equity-sharing experiment part of new affordable-housing project in Tacoma. Can it work?
A local organization is purchasing four parcels from the City of Tacoma to develop homes that will be collectively owned by the community as part of a process known as 'land banking.' On Feb. 28, the Pierce County Community Land Trust (PCCLT) announced it had acquired the land from to kick off its land banking efforts. PCCLT board member Alyssa Torrez told The News Tribune in an interview that the plan is to use the 36,000 square feet of land to build 48 homes in the next few years. Torrez, who is also a senior planner for the City of Tacoma, called the acquisition a 'perfect storm' of opportunity, as a recent change in the city's zoning code will allow for a higher density of units to be built in plots that were previously for single families. Maria Lee, a spokesperson for the City of Tacoma, told The News Tribune the four surplus properties were sold for $760,000. 'There is an active development agreement that requires 50% of the homes be for homebuyers at or below 80% [Area Median Income],' Lee wrote in an email to The News Tribune. According to U.S. Census Bureau data from 2023, median income for the Tacoma area is $83,857. Lee also said the land agreement dictates 50% of the units would be marketed to Black households. She said that is consistent with recommendations from the City's Disparity Study on homeownership from 2021. Jessie Baines is the founder and president of PCCLT. In an interview with The News Tribune, Baines said members of his organization were aware of such homeownership disparities and began working to reduce them. 'We began to look into how we could further opportunities for folks to become home buyers because we know that's the greatest way to build wealth in the community,' he said. Baines said opportunities are created for home buyers by using down-payment assistance programs such as the Covenant Homeownership Program in combination with down-payment assistance from the land trust to help people who otherwise would not have the cash to buy a home. The catch is that when the home is sold to a new qualified owner, the seller, whose original purchase of the home was subsidized, does not receive the full equity in the home. Baines said under the model the homeowner would receive the equity from a percentage of the appreciated value of the home when they decide to sell. He said the remaing appreciation value is 'paid forward' for the next buyer as a way of keeping the home affordable. Baines said the land trust model allows the community to collectively own the land and provides stewardship to maintain affordable home-ownership opportunities for generations. 'A lot of times folks are thinking that these affordable home-ownership units are highly subsidized by the government,' Baines told The News Tribune. 'They are, but the folks living in them also pay it forward for the next person.' Antavius Mitchell is a PCCLT board member and a prospective resident at the 69th Street and South Proctor Street project. In an interview with The News Tribune, Mitchell said he pays around $3,000 a month in rent for where he and his four kids currently live. 'And that's just rent, no equity,' he said. Mitchell said the PCCLT helped give him 'the keys' to becoming a homeowner. Ultimately he said the opportunity to pay it forward and provide an affordable homeownership opportunity to those who want to live in the home after him was something that caught his eye as well. Baines said the design and construction plan of townhome-style units are still in the works. He anticipated permitting approval to be announced around June 2025.
Yahoo
28-02-2025
- Politics
- Yahoo
Bill would expand covenant home ownership, forgive outstanding loans
Feb. 28—OLYMPIA — The move toward rectifying Washington's history of racial segregation in housing could expand, under a bill filed in this year's legislative session by Rep. Jamilla Taylor, D-Federal Way. HB 1696, sponsored by Taylor and 41 other representatives, would increase the income cap specified in the Covenant Homeownership Program. The CHP, which went into effect in July, provides down payment and closing cost assistance to groups of people identified in a covenant homeownership program study, according to Taylor. To qualify, a potential home buyer must be a first-time buyer, have lived in Washington before 1968 or be the descendant of someone who did, and be a member of a class that would have been discriminated against in the covenants — city and neighborhood restrictions on races allowed to buy homes there. Those include Black, Latino, Native American, Native Alaskan, Native Hawaiian and other Pacific Islander and Asian Indian and Korean residents, according to the Washington State Fair Housing Commission. Buyers must also have an annual income of 100% or less of the area median income, which in Grant County is $81,800 and in Adams County is $72,700, according to the WSFHC. HB 1696 would increase that figure to 140% of the AMI, or $114,520 in Grant County and $101,780 in Adams County. The CHP is funded by a $100 document recording assessment, according to the house bill analysis. The CHP was created in response to a 2023 study by Eastern Washington University that identified racially exclusive covenants in property deeds. The study identified more than 40,000 properties in Washington state — more than 80 properties in Grant County and a few in Adams County — that had been purchased with the condition that they never be sold to anyone who wasn't white. Those provisions were already legally unenforceable by the time the properties were built and have no legal validity at all since the Fair Housing Act of 1968, but the documents remain on file as a reminder of historic racism. "If my father was here in 1965, he would have been prohibited from purchasing homes in particular neighborhoods," State Rep. Jamilla Taylor, D-Federal Way, told the House of Representatives Feb. 10. "Racially restrictive covenants covered not only Black folks, but indigenous folks, Latino folks, Asian folks, and that's shaped many of our communities." The CHP doesn't remove the documents — that can't be done legally — but it does seek to address disparities in the housing market by offering assistance with down payments and closing costs to people who qualify. "Homeownership for people of color and other marginalized communities is 19% below that of white households," Taylor wrote in a statement, citing Washington Department of Commerce data, "and the homeownership rate for Black households is even lower." "A large number of renters who otherwise would be eligible for the Covenant program earned too much to be eligible, but still not enough to afford a modest home in today's market," said Steve Walker, executive director of the WSFHC. "As many first-time home buyers know all too well, even if you earn a higher wage and are in a good position to afford a mortgage, you're going to have trouble saving for the down payment. And when discrimination kept your parents or your grandparents from passing down wealth, you're less likely to be able to rely on family wealth to help you with that down payment." HB 1696 would also allow a loan to be forgiven after it's been outstanding for five years for borrowers whose income is 80% or less of the AMI. "Often new homeowners, especially those from historically marginalized communities, find themselves burdened with debt that limits their financial stability," said Dana Le Roy, executive director of Habitat for Humanity Spokane, in House testimony Monday. "Loan forgiveness ensures that home ownership remains a path of building wealth and not a cycle for financial hardship." "Many of the people in these programs live in urban areas with a cost of housing is (disproportionately) high. Raising the income limit to 140% of AMI only serves to help more people who have been held out of the wealth-building, pride of ownership and community building that home ownership (establishes). Well, we've helped nearly 20 families utilize the Covenant home loan program," said Bryan LaFlamme, a mortgage broker at Movement Mortgage in Tacoma. "We can help a lot more. One couple that comes to mind meets all the eligibility requirements for the Covenant home loan program. However, their income is a bit above 100% of the area median income. They're a professional couple, one working in multi-care and the other's an executive sous chef. Without utilizing the Covenant home loan program they'd be spending around 50% of their gross income on a mortgage and other monthly debt. It's just unsustainable and so they continue to rent We have the opportunity now to ally with these people in a way that most don't."
